Avi Philipson-led group blows deadline to complete William Vale deal
Investor in deal says group expects to “consummate the transaction shortly”
Just when you thought it was over, the long-running soap opera surrounding Williamsburg’s hip William Vale hotel has more drama to deliver.
Two months ago, a group led by healthcare investor Avi Philipson struck a surprise 11th-hour agreement with bankrupt owner All Year Holdings’ Israeli bondholders to buy the hotel for $157 million, disrupting an apparently done deal to sell the property to its co-owner Zelig Weiss.
By acquiring the five-star hotel, the young Philipson, son of controversial nursing home operator Bent Philipson, would have become Brooklyn’s next macher. Instead, he could be sticking to walkup apartments, a recent filing on the Tel Aviv Stock Exchange indicates.
The Philipson-led group blew its July 25 deadline to complete the deal, according to the trustee for the Israeli bondholders, who said the bondholders can go after the group’s $7.5 million deposit after it violated the rights of the sale.
Whalley Capital Group’s Stephen Gorodetsky, who said he is an investor in the Philipson deal, told The Real Deal that it isn’t off yet.
“We are in active conversations with the seller and expect to consummate the transaction shortly,” said Gorodetsky.
Gorodetsky didn’t explain why the deal was not completed by the deadline.
It’s the latest chapter in the long and increasingly convoluted saga around the swanky hotel at 111 North 12th Street, which Weiss and All Year founder Yoel Goldman built in 2016.
Last year, All Year appeared to have a deal to sell the property, including its debt and equity, to Monarch Alternative Capital and Richard Wagman’s Madison Capital.
For unknown reasons, that sale fell through, and Weiss made his own offer — despite being sued by All Year for allegedly diverting money from the hotel in a “self-dealing enrichment scheme.” By April, All Year appeared to have no other offers on the table and was close to selling its stake to Weiss.
A month later, Philipson — who in March partnered with mega landlord Rubin Schron to acquire a portfolio of more than 100 buildings owned by All Year in a deal that would allow it to exit bankruptcy — jumped into the bidding for the William Vale as well.
To acquire the hotel, Philipson would take on its existing debt and All Year’s 50 percent equity stake — a controlling interest in the property.
But Zelig Weiss, who owned the other 50 percent, wasn’t thrilled. In July, Weiss sued All Year, alleging that a transfer of ownership interest would require his approval. All Year disputed Weiss’ allegation.
“Weiss’s only connection to the Chapter 11 Case is that he is a jilted and unsuccessful bidder with respect to the William Vale hotel,” All Year said in a court filing.
Neither All Year nor Weiss’ lawyers returned requests for comment.